Important points about the classic model, Macroeconomics

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Q. Important points about the classic model?

The most important points about the classic model are as following:

• Monetary and fiscal policy can't affect the GDP or unemployment in classical model.
• In the classical model can no nominal variables affect a real variable. Price level that is a nominal variable, for illustration, does not affect consumption, which is a real variable. It is called classic dichotomy.

The monetary system.., bank A has a leverage ratio of 10 while bank B has a...

bank A has a leverage ratio of 10 while bank B has a leverage ratio of 20 similar losses on bank loans at the two banks cause the value of their assets to fall by 7 percent. Which

How central banks increase the monetary base, How central banks increase th...

How central banks increase the monetary base When the Central Bank cuts the target rate, they must simultaneously increase the monetary base by buying government securities. The

What is bowed-out shape, Why does a production possibilities frontier with ...

Why does a production possibilities frontier with increasing opportunity costs have a bowed-out shape?   The curve is bowed-out because some resources are better suited for the

Production possibilities curve, Using a production possibilities curve, an ...

Using a production possibilities curve, an economy that produces an output combination less than the maximum possible is depicted by a point located. a. at the top corner of the

Quantity Theory of Money, 2. Use the Quantity Theory of Money to explain in...

2. Use the Quantity Theory of Money to explain inflation (a increase in the overall level of prices). (4 points) If you were a member of the Federal Reserve Board of the Governor

GDP, HOW MARRIAGE AFFECTS GDP

HOW MARRIAGE AFFECTS GDP

Elasticity of supply, The supply equation for widgets is P = 100 + 10QS. Th...

The supply equation for widgets is P = 100 + 10QS. The elasticity of supply between quantity supplied of 9 and 11?

Trade barries , #discuss the arguments for and against the use of trade bar...

#discuss the arguments for and against the use of trade barries in anay counrty

Difficulties in measuring the national income, DIFFICULTIES IN MEASURING TH...

DIFFICULTIES IN MEASURING THE NATIONAL INCOME  There are some conceptual and statistical problems in measuring national product. Some items are excluded from the national incom

Employment, Employment  Full employment of human and non-human resource...

Employment  Full employment of human and non-human resources or at least minimization of unemployment is an accepted goal of macroeconomic policy. Also the best way to alleviat